Sales/Use Tax Question

Discussion in 'Flight Following' started by Yogi, May 17, 2018.

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  1. Yogi

    Yogi Filing Flight Plan

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    If a $100k aircraft is purchased from a private individual in CA (which has fly-away exemption for sales tax) and stored in AZ (which has use tax exemption for a tangible personal property purchased through casual sale), is there any tax liability to the buyer?
     
  2. Ravioli

    Ravioli En-Route

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    You said "stored in AZ." Do you mean the buyer is an AZ resident (or AZ domiciled entity) not involved in the routine purchase/sale of aircraft, or is AZ only the place of storage?
     
  3. Yogi

    Yogi Filing Flight Plan

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    Sorry, I should have been more specific. The buyer (me) lives in AZ and will keep the aircraft in a hanger in AZ. Not sure if it makes any difference, but the aircraft will only be used for pleasure and not for business. If I understand the tax code correctly, I don't have to pay any sales tax or use tax if I buy an aircraft from a private individual in a state which has no sales tax or fly-away exemption, since I live in AZ which has use tax exemption for casual sales. Just want to make sure if that's correct. Thanks!
     
  4. James331

    James331 Touchdown! Greaser!

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    Make sure you fill out all the paperwork with your AZ address and you're just responsible for AZ tax or lack thereof.

    If this is a private seller he should just fill out his part of a 8050-1&2, don't recall anywhere it even asks where you completed the purchase.

    I'd also refrain from entering your tail number in fuel machines and what not, it's not uncommon for greedy and desperate government types to mine that data and send threatening letters to try to generate some money for themselves.
     
    Last edited: May 17, 2018
  5. Timbeck2

    Timbeck2 En-Route

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    So where in AZ?
     
  6. Yogi

    Yogi Filing Flight Plan

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    Phoenix. I assume the use tax exemption mentioned in AZ Pub610 applies regardless of where in AZ I live?
     
  7. Kansas Flyer

    Kansas Flyer Pre-Flight

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    It might be a good idea to contact a local accountant to see what you're looking at AZ tax wise.

    What kind of aircraft are you looking to purchase?
     
  8. Yogi

    Yogi Filing Flight Plan

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    A piston single is all I can afford :)
     
  9. Jason608

    Jason608 Pre-takeoff checklist

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  10. Jason608

    Jason608 Pre-takeoff checklist

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    Just spoke with a tax consultant and it did not sound promising on avoiding the sales tax. My understanding is if you buy from an individual you may be able to avoid the 7% tax. If you buy from a broker, you have to pay the 7%.